NYSDEC’s decision reflects the competing demands it faces with respect to natural gas development in New York state.  The New York City watershed supplies drinking water to over nine million people; the Syracuse watershed supplies roughly 200,000 people.  Due to the high quality of this water, both cities are exempt from federal regulations requiring drinking water filtration.  Environmentalists and city officials have consistently called for a state ban on natural gas development in the watershed areas in order to protect drinking water sources.  However, NYSDEC Commissioner Alexander “Pete” Grannis has expressed concern that an outright ban on drilling in these areas, much of which is privately owned, could give rise to takings claims from property owners deprived of potentially lucrative leasing opportunities.

NYSDEC’s compromise, which was announced without an official written statement, may lower the temperature of the debate surrounding gas production in the Marcellus Shale.  It remains to be seen whether the Department’s present action will ultimately result in a solution that is both politically and environmentally tenable.

The four regulations found to be in need of revision were those governing acrylamide, epichlorohydrin, tetrachloroethylene, and trichloroethylene.  According to the EPA, “tetrachloroethylene and trichloroethylene are used in industrial and/or textile processing and can be introduced into drinking water from contaminated ground or surface water sources,” and “[a]crylamide and epicholorohydrin are impurities that can be introduced into drinking water during the water treatment process.”  The review states that reevaluations of the health risks posed by exposure to acrylamide, tetrachloroethylene, and trichloroethylene are under way.  The review also concludes that compliance with more stringent limits on the concentration of all four contaminants is feasible and will likely be required under the revised regulations.

The review was published in the Federal Register on March 29, 2010, one week after EPA Administrator Lisa Jackson announced a new drinking water protection strategy. The new strategy is intended to focus on the following four principles that the EPA seeks to promote:

• Addressing contaminants as a group rather than one at a time so that enhancement of drinking water protection can be achieved more quickly and cost-effectively.
• Fostering development of new drinking water treatment technologies to address health risks posed by a broad array of contaminants.
• Using the authority of multiple statutes, including the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) and the Toxic Substances Control Act (“TSCA”),  to help protect drinking water.
• Partnering with states to share more complete data from monitoring at public water systems.

Rules implementing these proposed reforms have not yet been developed, and the EPA’s recent review of National Primary Drinking Water Standards has followed the existing regulatory regime.  It remains to be seen whether, and to what extent, the EPA’s proposed reforms will take root, and may impact revisions to contaminant-specific standards.  Over the next few months, the EPA will seek input on developing its new approach from experts as well as members of the public.

• Read more on EPA’s new drinking water strategy

 DEP has taken the position that any drilling in the watershed should be banned due to risks posed to the drinking water supply by the technique used to extract gas from the underground shale, known as high-volume hydraulic fracturing.  In its comments on the DSGEIS, DEP makes a number of arguments to support its contention that the DSGEIS does not adequately analyze the potential significant adverse environmental impacts of drilling in the Marcellus Shale formation, including the following:

 The DSGEIS does not adequately analyze the possibility that contaminants may spill into surface waters or migrate underground into natural drinking water supplies or water supply tunnels;

• The DSGEIS’s requirements for the disclosure of the chemicals used in the hydraulic fracturing process are insufficiently protective of human health and the environment;
• The DSGEIS engages in “segmentation” in violation of the New York State Environmental Quality Review Act (“SEQRA”) by failing to adequately analyze potential significant adverse environmental impacts associated with waste disposal, surface water withdrawals, induced growth, cumulative impacts, air quality impacts, pipeline construction, and ancillary infrastructure;
• The no-drill buffer zones proposed in the DSGEIS are inadequate to protect New York City’s drinking water supply; and
• The DSGEIS does not sufficiently analyze alternatives to hydraulic fracturing, and does not at all address alternatives to natural gas development.

 DEP also issued a report in conjunction with its comments.

 The comment period for DEC’s DSGEIS has been extended to December 31, 2009.  While New York City’s interest in upstate drilling is based primarily on potential impacts to its watershed and water supply infrastructure, upstate municipalities are likely to focus on other issues, including tax revenues, road and truck traffic impacts, noise impacts, and preemption of local regulatory authority.

The Water District provides drinking water to its 45,000 customers in Manhasset, Great Neck, and New Hyde Park, NY.  After Freon-22 was detected in the aquifer waters, the Water District was forced to build a treatment system to remove the contaminants and render the water safe for public consumption in compliance with New York State drinking water quality standards.

SPR assisted the Water District in locating parties that were potentially responsible for the contamination, investigating the historic source of the contamination, and bringing a federal litigation in the Eastern District of New York against the owners of the source of the contamination for recovery the Water District’s costs.  The litigation asserted federal claims under the citizen suit provisions of the Safe Drinking Water Act (SDWA) and the Resource Conservation and Recovery Act (RCRA).

The Water District has now settled certain of its claims in that litigation for $2.75M.  These settlement funds will offset costs incurred to build the treatment system, legal and engineering fees, as well as the ongoing operation and maintenance costs of removing contaminants from the drinking water supply.  The settlement also serves as an important example to public water districts, demonstrating that ratepayers need not bear the burden of addressing environmental contamination in the water supply.

The following SPR attorneys represented the Water District in this matter: David Yudelson, Daniel Riesel, Dan Chorost, and Ashley Miller.

Earlier this year, the Fracturing Responsibility and Awareness of Chemicals Act of 2009 (“FRAC Act”) was introduced in both houses of Congress.  Currently, hydraulic fracturing is exempted from regulation under the Safe Drinking Water Act (“SDWA”).  The FRAC Act, if enacted, would repeal the exemption, thus subjecting hydraulic fracturing to the SDWA’s regulatory scheme and requiring drillers to disclosure the chemical ingredients of fracturing fluid.

Hydraulic fracturing, a process used to extract natural gas from shale, involves the use of high-pressure fluid to fracture underground rock.  The exact components of the fracturing fluid are unknown to the public, as drilling companies have maintained that the ingredients are proprietary.  Nationwide, concerns have been raised about potential contamination of underground and surface drinking water by the agents and byproducts of hydraulic fracturing.

Last week’s legislation is of particular interest to New Yorkers because a gas shale formation underlies a significant part of the Catskill watershed which provides much of the City’s drinking water supply.  New York’s Department of Environmental Conservation has recently released a draft Supplemental Generic Environmental Impact Statement (“DSGEIS”) on drilling in this shale formation.  The comment period for the DSGEIS closes on November 30, 2009.

• Hydrofracking May Have Contaminated Water Supply
• Elimination of Safe Drinking Water Act Exemption For Hydrofracking Proposed

The City of New York has a particular interest in the SGEIS because the Marcellus Shale formation underlies a significant part of the Catskill watershed which provides much of the City’s drinking water supply.  Erosion, runoff, and possible contamination of groundwater with toxic chemicals are just three of the potential dangers highlighted in a report prepared for the City by environmental consultants Hazen and Sawyer/Leggette, Brashears and Graham.  This report, available here in PDF, found that in addition to construction-related surface water impacts, the presence of a wellbore can “allow previously isolated contaminants to flow into shallow groundwater or surface water.”  The SGEIS would allow drilling within a few hundred feet of reservoirs, with some mitigation safety measures in place.  This would include the need for a site-specific State Environmental Quality Review Act (“SEQRA”) review in certain instances.  Use of hydrofracking in locations outside of New York is thought to have contributed to groundwater contamination, with further investigations underway.

DEC is accepting public comments on the SGEIS from now until November 30, 2009.  Mayor Bloomberg hasn’t yet given the City’s comments, nor the City’s overall position on the State’s plan, but has said he’ll do everything in his power to keep reservoirs safe.

• Review DEC’s SGEIS On Marcellus Shale Drilling
• Review New York City’s Consultant Report on Potential Impacts of Hydrofracking (PDF)

The NRDC Report, “Poisoning the Well: How the EPA is Ignoring Atrazine Contamination in Surface and Drinking Water in the Central United States,” analyzed EPA monitoring data for surface and drinking water and found that all 40 watersheds tested had detectable atrazine levels, with more than half of those watersheds having average concentrations above 1 ppb, the amount at which aquatic vegetation is affected.  The Report also found that both watersheds and drinking water systems had one-time peak atrazine concentrations well above 3 ppb; the highest peak concentration in a drinking water system was almost 40 ppb.  Residents of many of the communities with atrazine spikes were unaware of the problem – testing is typically conducted by the chemical’s manufacturer, who reports the data directly to the EPA.  Unless the concentration is above the 3 ppb yearly average, residents are generally not warned.

The Report argues that because EPA focuses on 90-day averages of atrazine concentrations, the agency has ignored the potentially significant adverse effects associated with brief exposures to the chemical.  Other recent studies suggest that when adults and fetuses are exposed to atrazine, even in small doses, they may suffer serious health effects, including birth defects, low birth weight, premature births, and disruptions to a woman’s menstrual cycle.  NRDC concluded that: (1) the US should phase out the use of atrazine, which is banned in the European Union; (2) farmers should immediately reduce their use of atrazine and implement nonchemical weed control methods; (3) EPA should broaden its monitoring program to include all vulnerable watersheds and sample after storm events and after fields have been chemically treated; (4) EPA should publish its monitoring results; and (5) consumers should use home filtration devices.

Steve Owens, Assistant Administrator for the EPA’s Office of Prevention, Pesticides, and Toxic Substances, released a statement to assure the public that “EPA is committed to ensuring the health and safety of all Americans. . . . [T]he Obama EPA will take a hard look at atrazine and other substances. This thorough review will rely on transparency and sound science, including independent scientific peer review. We will continue to closely track new scientific developments and will determine whether a change in our regulatory position is appropriate.”  Syngenta, the manufacturer of most of the atrazine sold in the US, stated that atrazine is safe and residues of atrazine in water “do not pose a health risk for consumers and . . . are within the limits defined by authorities.”

• Access a copy of the NRDC Report here

Hydrofracking is currently being considered for use in a number of states, including New York, which is preparing an environmental impact statement for the potential use of hydrofracking for recovery of natural gas in the Marcellus Shale formation.   The development of the Marcellus formation has been encouraged in the New York State Draft Energy Plan of 2009, calling also for safeguards in place to protect water supplies.   Other states, including North Dakota, have defended the technology as environmentally safe (pdf).  In addition, Congress is considering regulating hydrofracking by removing an exemption for the process under the Safe Drinking Water Act.

If contamination of water supplies can be confirmed as being linked to hydrofracking, it will no doubt impact the debate, and future potential uses of the technology.

• Elimination of Safe Drinking Water Act Exemption For “Hydrofracking” Proposed
• Basics of Hydrofracking (from ProPublica.org)
• Read more on the recent sampling results at Yale Environment 360
• Read more on clean water issues

The SDWA, under 42 U.S.C. § 300h, currently requires states to regulate, and imposes minimum regulatory requirements on, “subsurface emplacement of fluids by well injection” in order to protect drinking water supplies.  The Act currently exempts from such requirements “the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities.”  The proposed bills would remove this exemption, thus requiring regulation and permitting of hydraulic fracturing under the SDWA.  They would also require the disclosure by entities engaging in hydraulic fracturing of the chemical constituents, but not the proprietary chemical formulas, used in the fracturing process.  Both bills are currently in committee.

The proposed legislation comes at a time when pressure to extract natural gas deposits via hydrofracking is mounting.  For example, the Marcellus Shale formation in New York has been identified as a location for the possible use of hydrofracking technology.   The New York State Draft Energy Plan of 2009 recommends the “development of the Marcellus Shale natural gas formation with environmental safeguards that are protective of water supplies and natural resources.”  The New York State Department of Environmental Conservation is currently in the process of preparing a Draft Supplemental Generic Environmental Impact Statement for hydraulic fracturing to develop the Marcellus Shale.  More information is available on NYSDEC’s website.

• Read more about clean water issues.